Erie’s Murky Future for Affordable Housing

Town lawmakers are debating how to build more affordable housing during a trying economic time.

It’s becoming more expensive to live in Erie, yet pathways to lowering the cost of buying a home in the city are proving to be difficult to find.

At issue is whether Erie should increase its affordable housing stock through subsidized or income-restricted units or through naturally occurring affordable housing. Subsidized and income-restricted units often require government funding to operate, whereas naturally occurring affordable housing refers to existing housing units that are cheaper compared to newly built homes.

Former Mayor Justin Brooks campaigned on a promise to support the development of affordable housing and led the charge to purchase land for the Cheesman Street Residences, a 35-unit affordable housing development for Erie residents earning 120% of the area’s median income or less. That means a family of four can earn no more than $175,000.

However, Erie’s new town leadership appears to have other ideas in mind. During a town council study session on March 4, Erie Mayor Andrew Moore said the town should revisit the affordability requirements included in Erie’s Comprehensive Plan, a planning document that is designed to guide development in the town. Moore added that the town should revisit Ordinance 017-2023, which sets forth Erie’s guidelines for affordable housing development.

“For me, this is less about growth because I believe growth will happen,” Moore said. “It’s really more about the quality, type of housing, and, of course, the quantity of housing that we’ll move forward with.”

Erie is one of the fastest-growing cities in Boulder County, with its population more than doubled to over 40,000 residents between 2010 and 2024. That growth has put significant upward pressure on home values in the town, with Erie’s median home price standing at just under $760,000 as of February, according to Redfin.

Rising home prices are a double-edged sword for Erie. On one hand, they are a sign that the city’s growth has attracted higher-income households. These households often pay more property taxes while requiring fewer municipal services, thereby improving the town’s revenue per acre. However, the rising cost of living also makes it more difficult for service workers, firefighters, and teachers to live in town.

According to Erie’s 2024 Housing Needs Assessment, about 16% of all households are cost-burdened, meaning they pay more than the recommended 30% of their income on housing expenses. But Erie has few options to preserve existing housing units to accommodate its growth, thereby requiring the city to focus on building new homes to address the issue, the report states.

As of 2024, Erie’s Housing Needs Assessment showed it had a housing shortage of more than 3,300 units compared to its population growth with housing units for senior citizens facing the most significant gap.

Relying on new construction can be challenging, given the myriad economic challenges homebuilders face. The cost of debt, material, labor, and land have all increased significantly since the pandemic began. These factors make it difficult, if not impossible, to build new homes at affordable price points.

Erie has made several attempts to incentivize more affordable housing development. For instance, the city committed to meeting Boulder County’s goals of having at least 12% of new homes slated as affordable. The city also created a policy to incentivize new affordable home construction within special districts.

It also passed an inclusionary housing ordinance in 2024. The ordinance required all new developments with eight or more units to reserve 15% of the units as affordable housing. For ownership properties, the units needed to be affordable for people earning between 100% and 120% AMI, or $146,000 to $175,000 for a family of four. Rental properties needed to reserve units that were affordable for households earning between 60% and 80% AMI, or $87,000 to $116,000 for a family of four.

However, the plan faced significant pushback from residents and homebuilder groups alike. The Home Builders Association of Metro Denver sent a letter to former mayor Brooks saying the inclusionary housing ordinance will increase the cost of building in Erie.

“While we understand the intention of inclusionary housing policies is to make housing more affordable and may feel like a win, the reality is these policies typically make housing less affordable – either through lowering supply and/or adding costs that are passed onto other homebuyers in order to keep projects feasible,” the letter reads in part.

Town Councilor Brandon Bell also questioned the need to build more deed-restricted affordable housing. Most affordable deeds carry a 30-year affordability requirement, which Bell said placed an extra burden on the city to manage the properties.

“It gets to the point where we’re less in the business of creating housing stock…and we become housing management,” Bell said.

Moore’s administration appears to be shifting the focus to more tax-based solutions, such as increasing the city’s open space fee or adding additional mill levies to pay for more affordable housing development. He said there will be future study sessions dedicated to talking about these ideas in depth.

For Town Council Emily Baer, building more affordable housing is about more than simply adding housing units at a certain price point. It will also help Erie grow and attract the new retail and employment opportunities that town residents want.

“It’s all connected, and that affects our economic vitality,” Baer said.

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